Implications of judgment stopping Federation Account allocations to Rivers - watchtower media
There was disquiet yesterday in Rivers State following the stoppage of funds accruing to the state by a Federal High Court in Abuja.
The court on Wednesday restrained the Central Bank of Nigeria (CBN) and the Accountant General of the Federation from releasing funds to the state government.
The judgment stopped all allocations from the Federation Accounts to Rivers pending “when a lawful appropriation act is passed by a validly constituted House of Assembly”.
In fact, the court barred banks from allowing the government of Rivers and Governor Siminalayi Fubara to withdraw money from the state’s accounts.
Justice Joyce Abdulmalik delivered the judgment in a suit filed by the Rivers State House of Assembly and Martins Amaewhule as Speaker.
The 27 lawmakers, led by Speaker Amaewhule have been wielding legal swords against their derecognition and delisting by Governor Fubara.
Fubara is of the opinion that the legislators lost their seats for purportedly defecting from the Peoples Democratic Party (PDP) to the All Progressives Congress (APC) and were no longer worthy to be members of the House of Assembly.
Though no formal judgment declared their seats vacant, Fubara held his conviction refusing to transact any government business with the Amaewhule-led House. He, instead chose his own House of Assembly, consisting of three lawmakers with Victor Oko-Jumbo as the Speaker. The governor presented his 2024 Appropriation Bill to the three lawmakers, who swiftly passed it into law.
As the crisis intensified, the presidential peace accord designed to find permanent solutions to the tension in the state mandated the governor to re-present the Appropriation Bill to the Amaewhule-led Assembly. But the demand was one of the resolutions, which Fubara refused to implement until the accord crumbled.
Irked by his failure to re-present the bill, the Amaewhule-led House of Assembly filed a case at the Federal High Court, challenging Fubara’s disbursement of state’s funds relying on a budget passed by the three lawmakers. The House, among other prayers, asked the court to stop all federal allocations to the state pending the passage of a proper appropriation act.
The court granted their prayers and delivered the judgment that has unsettled the state. Despite dismissing the judgment as a non-issue, its enforcement will have far-reaching implications on the effective administration of the state.
A peep at the 2024 budget shows that governance will be heavily impacted without federal revenue allocations . The 2024 Appropriation has a total budget size of N800,392,485,433.
The personnel cost is expected to cost N252,894,753,692; overhead, N23,715,775,317; N76,715,775,317 is earmarked for debt services; grants, contribution subsidies to take N8,063,074,743. The capital expenditure is to consume N410,266,685,091.
In the revenue composition of the budget, the highest revenue expectation of the state is from the Federation Account. The revenue expected from the federation source is N283,235,306,406.
Further breakdown of estimated revenue from the Federation Account are Statutory Allocations, N68,458,610,494; Derivation, N145,256,581,463; Value Added Tax (VAT), N55,650,000,000 and other FAAC receipts of N13,600,114,449.
The other revenue source for the state is the Internally Generated Revenue (IGR) which is expected to contribute N231,057,836,945.
Curiously, the budget made provisions for N237,000,000,000 as loans accounting for the second highest revenue source for the state.
Other sources of revenue in the budget are Aids and Grants, N12,285,000,000 and other receipts of N29,879,557,210.
Fubara’s administration may not be able to cope should the judgment sees the light of the day. With the figures in the budget, the IGR, which is the only reliable alternative source of revenue totally controlled by the state is barely enough to meet up with the recurrent expenditure.
While the total IGR is N231,057,836,945; the o verall recurrent expenditure amounts to N361,598,042,570 comprising personnel, NN252,894,753,692 and other recurrent expenditures of N108,703,288,878.
Though the IGR is enough to pay salaries, wages and allowances of state workers of N128,904,553,692, its balance of N102,153,283,253 cannot offset other recurrent expenditures of N108,703,288,878 consisting of Overheads, N23,715,775,317; Public Debts Charges, N76,924,438,819 and others such as Grants, Subsidies and transfers of N8,063,074,743.
Obviously, unless the ones already paid for, the judgment if it subsists will stall all ongoing projects.
The Fubara administration may end up having the highest number of abandoned projects if efforts are not made to halt the implementation of the judgment either by diligent prosecution or through genuine reconciliation.
The IGR can’t take care of Capital Expenditures amounting to N410,266,685,091. All the governor’s legacy projects, 19 in all, would be affected should the judgment remain in force.
Some of the projects the government is passionate about are the Port Harcourt Ring Road, extension of dualisation of Ahoada-Omoku road, Agba-Ndele road, 12.6km Kalabari-Emohua road, Buguma ring road; Constituency projects, repairs of failed roads in various parts of Port Harcourt; completion of 191 model primary schools, shore protection works and Borikiri-Okirika dual carriage bridge among others.
In fact, all citizens nominated projects listed in the capital expenditure section of the budget and valued for N9,641,146,532 may no longer be feasible.
Some of the citizens nominated projects that may be adversely affected are community-oriented and programmes designed to alleviate the sufferings of road users and generate employments for the people especially at the grassroots.
The capital budget contains plethora of gender, equity, and social inclusion responsive projects amounting to N4,160,025,566 and all of them may not see the light of the day.
The provision of domestic loans provided for in the budget amounting to N235,000,000,000 would have given the government a soft landing, but there are fears that banks and other capital institutions may decline requests for such facilities.
Most people believe that if the governor had secured such loans before the judgment, he would have used them to augment shortfalls that may arise from the enforcement of the judgeent.
Unless the state has enough savings to cope with the current development, the judgment would surely throw a spanner in the administration of Rivers government .
But Fubara said the judgment was “the least” of his problems. He assured the people that despite the court order, he would continue payments of contractors and ensure workers’ salaries were disbursed to workers.
Fubara said that allocations for the 23 council chairmen would be credited and that the Joint Accounts Allocation Committee (JAAC) procedures had been completed.
The governor appealed to his supporters to remain resilient and assured them that all challenges would be over.
“So, you don’t need to bother about the stories on social media. That one is the least of your trouble. By tomorrow, I am still going to pay my contractors.
“By tomorrow, those of you who have not gotten your salaries, your alert will also come to you. Local Government Chairmen, they have had their JAAC, your money is coming to your accounts.
“Who is the loser? We are not doing luncheon here to celebrate loss or failure. We are praising God because He is taking us to a higher position. So, you see the reason why you need to be happy? You see the reason why we chose today to celebrate the goodness of God in our state and in our lives? We can’t thank Him enough.
“I can tell you, they said we are not going to last for one week, we are here, we have done one year plus. We are also doing one year anniversary of their attack.
“They said those buccaneers will not leave as local government chairmen, today, we have the 23 local government chairmen sitting here with us. They said their commissioners should resign so that we will be crippled. Today, we have more than 23 commissioners.
“Who is the loser? We are not doing luncheon here to celebrate loss or failure. We are praising God because He is taking us to a higher position. So, you see the reason why you need to be happy? You see the reason why we chose today to celebrate the goodness of God in our state and in our lives? We can’t thank Him enough.
“I can tell you, they said we are not going to last for one week, we are here, we have done one year plus. We are also doing one year anniversary of their attack.
“They said those buccaneers will not leave as local government chairmen, today, we have the 23 local government chairmen sitting here with us. They said their commissioners should resign so that we will be crippled. Today, we have more than 23 commissioners.
He insisted that there was nothing happening that could not be surmounted, and urged all Rivers people to brace up, be strong and be assured that the unity and peace was still intact.
Also, the Director-General of the Simplified Movement Worldwide Evans Bapakaye Bipi, said the judgment would not adversely affect the finances of the state.
He said: “There is no cause for alarm as the State and Local Government monthly Joint Accounts Allocation Committee meeting has already been held preparatory for payment of salaries and other entitlements to workers, government functionaries and contractors as declared by the governor”.
But by all indications, the 2024 Budget will suffer adverse effects if the governor fails to adopt deliberate measures to avert the enforcement of the judgment.
